Expanding Medicaid Essential for Controlling Health Insurance Costs

Expanding Medicaid Essential for Controlling Health Insurance Costs

Today the South Carolina House begins their budget debate.Whether our state should expand Medicaid to cover individuals with incomes up to 138% of the federal poverty level will be debated.

It is critically important for our state to accept $11.2 billion through 2020 of federal money to cover all the cost for the first 3 years and 90% of it after that.

An economic study projects that this new money will create 44,000 jobs and the result will be that the state will actually net $9 million more to its budget by 2020.

Even more important is the direct effect expanding Medicaid will have on small businesses.The S.C. Small Business Chamber was the first business organization in the state to support the expansion and last week the Charleston Chamber of Commerce also endorsed expanding Medicaid.

Read the op.ed below to see how expanding Medicaid will help small businesses in promoting healthier workers and reducing health insurance expenses.

Call your House member now with this message:

Please expand Medicaid to help control the cost of health insurance and health care for small businesses.

Recently a representative of the Heritage Foundation told a South Carolina Senate subcommittee that expanding the state’s Medicaid program as allowed under the Affordable Care Act would be bad welfare policy.

Director Tony Keck of our Department of Health and Human Services has framed the argument against expanding Medicaid as an inefficient way of improving the health of our citizens.

These opponents of Medicaid expansion want to distract us from the real purpose of national healthcare reform and providing health insurance to our low-income citizens with incomes up to 138 percent of the federal poverty level.

In 2000 when I co-founded the South Carolina Small Business Chamber of Commerce we held meetings around the state to find out the major issues on the minds of small businesses. One of the top priorities we found was the cost of health insurance. Small businesses wanted affordable health insurance for themselves and their employees. They weren’t talking about welfare or making South Carolinians healthier.

Addressing this problem became one of the key issues throughout the last decade. My organization offered several proposals including raising the state’s cigarette tax to generate funds to subsidize small businesses providing health insurance to low-income workers. This tax was eventually increased in 2010 but the revenue was no longer necessary to help small businesses because national health care reform passed to address the problem of healthcare costs for all small businesses across the country.

There is no question about what national healthcare reform was about. It was titled the “Affordable Care Act.” It wasn’t called the Welfare Act of 2010 or the Improve the Health of our Citizens Act.

It was primarily about affordable health insurance and health care. It was the compromise solution to the demands of businesses to get health insurance and healthcare costs under control.

Our Legislature is now considering one of the most important aspects of the Affordable Care Act that will help make health insurance more affordable for businesses and individuals — expanding Medicaid to those who have incomes up to 138 percent of the federal poverty level.

Many of our state’s low-income workers are employed by our small businesses and here is how a Medicaid expansion will directly help us:

First, there is a significant cost to a small business when workers are not on the job because they are sick or have to care for a family member who is ill. Workers with health insurance for themselves and their families miss less work due to illness and are more productive.

Second, small businesses that want to offer health insurance to employees will find it more affordable under a Medicaid expansion. Small employers with Medicaid-eligible workers will have fewer employees to cover on a private group health plan and thus have less in premiums to pay. In addition, with Medicaid expansion the cost of the employee’s private insurance will drop due to a reduction in the “hidden tax” on every health insurance policy to pay for the uncompensated care for the uninsured. Based on projections by Milliman Inc., the actuarial firm used by Director Keck for his cost projections, the reduced premiums could be up to $1,000 per year for family coverage.

The third benefit of a Medicaid expansion involves the requirement of the Affordable Care Act that businesses with 50 or more employees either offer health insurance or pay a penalty. Many larger small businesses in this category will decide to offer insurance but they won’t have any premiums to pay for their employees on Medicaid.

Medicaid expansion is thus critical to achieving affordable health insurance and health care for small business and all of us. Those who want to distract the public and Legislature from the real purpose of expanding Medicaid do so only to confuse the issue. We cannot let them hijack this debate.

Frank Knapp Jr. is president and CEO of the South Carolina Small Business Chamber of Commerce. For more information go to www.scsbc.org.

UnConflicted is the small business advocacy blog of Frank Knapp, Jr., President & CEO of the South Carolina Small Business Chamber of Commerce. Visit our website to join, subscribe to our newsletter, or follow the issues affecting small businesses in SC: http://www.scsbc.org